Pension Auto-Enrolment Legislaton

Pension auto-enrolment legislation

Pension auto-enrolment does apply to contractors working under an umbrella company. This means that employers will be automatically
enrolling contractors into a workplace pension. The pension contributions are based on age and income.

Joining a workplace pension scheme means that your take-home income will be reduced. But this may:

mean you’re entitled to tax credits or an increase in the amount of tax credits you get (although you may not
get this until the next tax year)

mean you’re entitled to an income-related benefit or an increase in the amount of benefit you get

reduce the amount of student loan repayments you need to make

Workplace pension contributions

Date

From April 2018

From April 2019

Employer pays (min)

2%

3%

You pay

3%

5%

Total min contribution

5%

8%

These contributions could be higher for you or your employer depending on your specific pension scheme rules.

In some schemes, your employer has the option to pay in more than the legal minimum. In these schemes, you can pay in less
as long as your employer puts in enough to meet the total minimum contribution. Check all details with your umbrella
company.

Your Umbrella Company Must Comply

As an employer, all umbrella companies will have to comply with the legislation over the coming months.

The legislation states that contributions from employers must be a minimum of 1% of qualifying earnings. This will rise to
3% in 2018.

Contractors i.e. the employees of umbrella companies must also contribute at least 1% of their earnings which will increase
to 5% by 2018.

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Pension Auto-Enrolment Legislaton

Pension auto-enrolment legislation

Pension auto-enrolment does apply to contractors working under an umbrella company. This means that employers will be automatically
enrolling contractors into a workplace pension. The pension contributions are based on age and income.

Joining a workplace pension scheme means that your take-home income will be reduced. But this may:

mean you’re entitled to tax credits or an increase in the amount of tax credits you get (although you may not
get this until the next tax year)

mean you’re entitled to an income-related benefit or an increase in the amount of benefit you get

reduce the amount of student loan repayments you need to make

Workplace pension contributions

Date

From April 2018

From April 2019

Employer pays (min)

2%

3%

You pay

3%

5%

Total min contribution

5%

8%

These contributions could be higher for you or your employer depending on your specific pension scheme rules.

In some schemes, your employer has the option to pay in more than the legal minimum. In these schemes, you can pay in less
as long as your employer puts in enough to meet the total minimum contribution. Check all details with your umbrella
company.

Your Umbrella Company Must Comply

As an employer, all umbrella companies will have to comply with the legislation over the coming months.

The legislation states that contributions from employers must be a minimum of 1% of qualifying earnings. This will rise to
3% in 2018.

Contractors i.e. the employees of umbrella companies must also contribute at least 1% of their earnings which will increase
to 5% by 2018.